Minimizing tax paid on money recieved to buy a house?

from Lisle, Il

posted about 1 year ago

Hi Guys,

I was hoping someone might guide me in the right direction. To make a long story short a relative has given me and my wife a large sum of money as a gift and we want to use this to purchase our first Condo/home. Is there a special type of account or fund I can deposit this into to avoid paying taxes on money that I plan on using completely for a real estate venture? Or to minimize the double taxing of both "income" tax and property tax?

Accountant from New York, NY

replied about 1 year ago

@Ali QudsiUnless you are some not-for-profit organization - you will be required to pay property taxes.There are some instances that you buy a newly developed land/building and the county strikes a deal with you that you won't have to pay property taxes for X years but will ultimately have to pay them once the period is over.

You can decrease your taxable income related to rental properties with depreciation. Depreciation is a non-cash expense so it will allow you to cash-flow but show little to no income on your tax return.

from Brooklyn, New York

replied about 1 year ago

1) if the person who gave the gift recognized it on their tax return as a gift you don’t owe tax, and there is a large gift lifetime gift limit (over 5m 2) property tax has nothing to do with income tax, which is what the gift has effect on. Only way to reduce this is through local or state credits/deductions

from Buffalo Grove, Illinois

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